Court of Appeals Says No Statute of Limitations for Forged Deed Allegations

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May 18, 2015

Court of Appeals Says No Statute of Limitations for Forged Deed Allegations

Posted By
Mahir Nisar Attorney at Law

New York's highest court recently addressed a legal dispute arising
from an allegedly forged deed. There is no question a forged deed is invalid.
But the question here was whether the parties wrongfully deprived of their
property by the alleged forgery had filed their claim too late to be heard
by the courts.

Faison v. Lewis

This case revolves around the ownership of a house in Brooklyn. The owner
of the house died in 2000, leaving the property to her son and daughter.
The daughter later transferred her one-half interest to her daughter,
Tonya Lewis. In 2001, Lewis filed a “corrected deed,” which
purported to transfer her uncle's one-half interest to her as well,
giving her full ownership of the house.

After the uncle passed away in 2001, his daughter, Dorothy Faison, sued
Lewis, claiming the corrected deed was a forgery, which her father never
signed. Brooklyn Supreme Court initially dismissed the complaint in 2003,
as Faison was not the administrator of her father's estate, and therefore
lacked standing to sue.

Several years later, in 2009, Lewis took out a mortgage of approximately
$270,000 on the house from Bank of America. The next year Faison was named
administrator of her father's estate and proceeded to sue Lewis, Bank
of America, and others, seeking “to declare the deed and mortgage
null and void based on the alleged forgery,” which occurred as far
back as 2000.

Brooklyn Supreme Court again dismissed Faison's complaint, this time
because she filed after the expiration of the six-year statute of limitations
governing fraud claims under New York law. The Appellate Division, Second
Department, later upheld this dismissal with respect to the forgery claim
against Bank of America. The Court of Appeals subsequently agreed to review
this decision.

In a
May 12 opinion, a divided Court of Appeals reversed the two lower courts and held Faison
could proceed with her case against Bank of America. Assuming for purposes
of this appeal the corrected deed was in fact forged, the Court of Appeals
said the statute of limitations did not apply. Judge Jenny Rivera, writing
for the majority, said a forged deed “was void at its inception,”
and similarly any “encumbrance,” such as a mortgage, on the
property based on a forged title is legally void. In other words, as a
matter of law, a forged deed has no legal authority and cannot form the
basis of a valid mortgage. And Judge Rivera, citing prior New York case
law, said the Court would not “not impose statutes of limitations
on forged deeds because the resulting prejudice to the 'rights of
the true owner of real estate' only 'open[s] the door for the
destruction of all titles, and makes[s] it much easier for the criminal
to purloin real than personal property'.”

Need Help With Real Property Titles?

The Court of Appeals' decision is good news for anyone who seeks to
recover property improperly transferred by a forged deed. Establishing
legal title to real estate is often a complicated matter. If you need
advice from an experienced New York real estate attorney,
contact our offices right away.